Pfizer Inc.’s Pharmacia unit was found by a Wisconsin State Court jury to have illegally overcharged Wisconsin’s Medicaid program and $9 million in compensatory damages were awarded. Jurors in Madison, Wisconsin, found that Pharmacia should pay the $9 million to compensate the state for its losses. But the most important part of the case involves a penalty phase. A hearing to determine the amount of forfeitures hadn’t been scheduled at press time. Attorney General J. B. Van Hollen authorized the lawsuit and said that he considered this a tremendous victory for the people of his state.
The jury ruled that Pharmacia violated Wisconsin’s Medicaid Fraud law more than 1.4 million times. Under state law, in addition to the compensatory damages, the judge in the case may award from $100 to $15,000 per violation, or as much as $21 billion. The state will make a recommendation at the low end, which would still be a sizable amount. Even if the judge awards only $100 per violation, that will still be $144 million. The theory in the Wisconsin case is the very same as in Alabama’s cases.
The companies are accused of posting artificially inflated AWP and WAC prices and then “marketing the spread” to win business by encouraging pharmacies and doctors to seek reimbursement from state Medicaid programs at the full reported prices. The wider the spread, the more likely a doctor or pharmacy was to promote a company’s product. An example in Wisconsin involved Pharmacia reporting an AWP of $241.36 for a 20 milligram dose of the cancer drug Adriamycin in April 2000 when the medicine was actually selling at wholesale for as low as $33.43. Doctors were told they could keep the difference. The Attorney General stated that the “verdict confirms that Pharmacia knew when it published false average wholesale prices for its drugs it would cause the state to grossly overpay for prescription drugs.” Pfizer says it will appeal the verdict. Chuck Barnhill of the firm of Miner, Barnhill & Galland in Chicago represented the State and did a tremendous job.
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